Find users

Shadow Prices - Introduction to Operations Research - Lecture Slides

Slides, Operations Research

Post: January 9th, 2013
Description
These are the important key points of lecture slides of Introduction to Operations Research are:Shadow Prices, Economic Interpretation, Units of Activity, Resource Level, Marginal Value of Resource, Duality Theory, Optimal Solution, Shadow Price, Optimal Value, Complementary Slackness Theorem
These are the important key points of lecture slides of Introduction to Operations Research are:Shadow Prices, Economic Interpretation, Units of Activity, Resource Level, Marginal Value of Resource, Duality Theory, Optimal Solution, Shadow Price, Optimal Value, Complementary Slackness Theorem
-
Embed this document

Report Report

Reason:

Send Message

Login or register to download this document!

If you are already registered, login otherwise Register , it just takes 1 minute!

Uploaded by:

aarif

aarif
Universityuni_5documents_40doc_answ
Embed this document
Get the App
Contents
Shadow Prices max Z = ∑ c j x j x j =1 n a11 x1 + a12 x 2 + ... + a1n x n ≤ b1 a21 x 1 + a22 x 2 + ... + a2 n x n ≤ b2 ... ... ... ... ... ... ... .. . am1 x1 + a m2 x 2 + ... + amn x n ≤ bm x1 , x 2 ,..., x n ≥ 0 Economic interpretation? Docsity.com xj : units of activity j bi : resource level i aij : units of resource level i used per one unit of activity j cj : return/loss from unit of activity j z : total return/loss z* : optimal return/loss Docsity.com what is the “value” of resource i ? How much are we going to gain/lose if we have more from resource i ? Instead of bi we have bi + ε. As a result, instead of z* we now have z* + ∆. The value of ∆ generated by one unit of ε is called the shadow price of resource i. It is better to use the term “marginal value of resource i” ...... but ...... Docsity.com Clue ... From duality theory we know that z* = y*b where y* is the optimal solution to the dual problem..

Docsity.com

Learning becomes social!

Authentication required

This feature is reserved for registered user

Register Login

Docsity.com

Learning becomes social!

Authentication required

Hi!
In order to freely download all the documents on Docsity, please register or login:

Register Login